By July 5, 2017 Read More →

Alberta oil & gas sector asks Alberta, Canada to trim regulations, compliance costs – CAPP study

Capital spending in Canada forecast $44 billion in 2017, 46% decrease from 2014

The provincial government and the energy industry could create more than 24,000 new jobs for Albertans and grow the province’s economy by nearly $5 billion, according to a new report from the Canadian Association of Petroleum Producers (CAPP).

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Industry continues to face mounting costs and barriers to growth due to changes in provincial and federal government policies and regulations such as methane emissions, carbon pricing, municipal and corporate tax increases, wetland policy, well liability and closure, and caribou management, among others.

In addition, low global commodity prices, rapidly changing market dynamics, and new policy directions in the United States have led to negative impacts on oil and natural gas investment and competitiveness in Canada.

“Investment decisions in our industry often take place many years before a project comes on stream. In order to continue to attract those investments with a long-term horizon, we must have a degree of policy and regulatory stability,” said Rob Dutton, chair of Board of Governors.

The report outlines how new competitiveness measures could be created to attract investment and create jobs in Alberta’s oil and natural gas sector, while protecting the high standards already in place for health, safety and environmental regulation.

“Our proposal to streamline provincial and federal policies and regulations has the potential to achieve regulatory efficiencies, eliminate duplication and create a framework for shared sustainable prosperity in Canada,” said Tim McMillan, CAPP CEO.

CAPP estimates the cumulative costs associated with the changes in provincial and federal government policies and regulations to conventional and unconventional development could range between $450 million and $760 million annually in the near term.

Overall capital spending in Canada is forecast to be $44 billion in 2017, a 46-per-cent decrease from $81 billion in 2014. Meanwhile, spending in the U.S. is expected to rise 38 per cent to $120 billion this year.

Through collaboration with government on essential policy challenges the energy sector can attract new investment to Alberta and improve our competitiveness.

CAPP says it is critical Alberta and Canada compare their policies and regulatory regimes with the U.S., Canada’s only major market for oil and natural gas exports, and its biggest competitor for capital.

“The competition for capital in our business is fierce. It goes to the project and the basin with the highest rate of return. Alberta and Canada are becoming an increasingly more difficult places to attract capital,” said Dutton.


By working together, CAPP estimates unemployment in Alberta can be reduced nearly 25 per cent.

As well, we can generate $4.5 billion in gross domestic product, $207 million in additional income tax, and $79 million in additional royalties in the near term on an average annual basis.

Canada’s upstream oil and natural gas industry needs to rebalance the playing field and restore investment while maintaining Alberta’s position as a leader in responsible development.

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1 Comment on "Alberta oil & gas sector asks Alberta, Canada to trim regulations, compliance costs – CAPP study"

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  1. Jim Williamson says:

    So how stable will Alberta appear if after only one year of the Climate Action Plan the provincial government reverses direction yet again? The regulations that Trump’s admin are establishing are likely to get overturned or scrapped at some point. Isn’t predictability a key factor in investment decisions?